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Revista BlogWed, 14 Mar 2018 15:07:10 +0000en-UShourly12018 Outpatient Development Report Now Available!http://mobscene.revistamed.com/2018-outpatient-development-report-now-available/
http://mobscene.revistamed.com/2018-outpatient-development-report-now-available/#commentsWed, 14 Mar 2018 14:59:11 +0000http://mobscene.revistamed.com/?p=1220Revista has posted the 2018 Outpatient Development Report. This year’s report measures information on 3rd party developed and self developed outpatient projects. Overall, 3rd party developers completed or started almost 10 million square feet of outpatient space in 2017. that represents 29% of all outpatient space developed in 2017 (started or completed).

MedCraft Healthcare Real Estate was the most active developer in 2017 with a total of 8 projects and 470,000 square feet started or completed. NexCore Group was the most active for project starts and HTA Development LLC was the most active for project completions.

The report measures total amounts and amounts by the top developers for construction starts and completions combined and individually. Data are also trended for the past 3 years. Data from the report are gathered from voluntary surveys provided by 25 companies and data derived from another 125 companies.

HREI magazine is featuring highlights from the survey in the cover story of its March 2018 edition. To read the cover story, please click here or visit www.HREInsights.com.

Revista is also offering a complimentary data brief on the report. Please click here to visit and download.

The full outpatient medical real estate report is available exclusively to Revista subscribers. Please contact Mike Hargrave at 443-949-8794 or mike@revistamed.comfor more information or to subscribe to Revista’s data service.

]]>http://mobscene.revistamed.com/2018-outpatient-development-report-now-available/feed/0New White Paper Postedhttp://mobscene.revistamed.com/new-white-paper-posted/
http://mobscene.revistamed.com/new-white-paper-posted/#commentsWed, 07 Mar 2018 15:09:14 +0000http://mobscene.revistamed.com/?p=1213When it comes to healthcare and related real estate, you can expect providers and investors to look for ways to make healthcare more convenient and cost effective while they are working on efficiency and consolidation. 2018 will produce more of the trends that shaped last year in healthcare real estate, but Houston leads the way with some new sector trends.

Although Houston health systems are increasing the size of their footprint on the city’s landscape with new hospitals in major submarkets, hospitals are reducing the number of beds while expanding other departments. Check out the changes in the use of hospital rooms and floors in Houston while the city continues to grow at an astounding rate.

Like most major markets, the shift to outpatient care is well underway and accelerating. Patients will choose where they go for care based on the customer experience. However, expect retail settings to provide healthcare destinations while trends for hospitals are taking a hint from the hospitality industry.

Have you heard of “collabitition” between health systems? The world’s largest medical center, the Texas Medical Center (TMC) in Houston, has some big plans. Leveraging the collective power of the TMC’s renowned institutions in a shared, centrally managed environment will result in a research collaborative unlike anything healthcare has ever seen. Click here for more information in the Year-End Healthcare Report for Houston: file:///C:/Users/byoung/Downloads/2017Q4HealthcareHoustonReportColliers%20(5).pdf

http://www.revistamed.com/medical-real-estate-reports

]]>http://mobscene.revistamed.com/new-white-paper-posted/feed/0Big Reverse Monetization Kicks Off 2018http://mobscene.revistamed.com/big-reverse-monetization-kicks-off-2018/
http://mobscene.revistamed.com/big-reverse-monetization-kicks-off-2018/#commentsMon, 26 Feb 2018 19:54:51 +0000http://mobscene.revistamed.com/?p=1205Prior to the start of 2018, several members of the Editorial Advisory Board (EAB) of Healthcare Real Estate Insights™ predicted that the sector would see some transactions in which health systems would buy medical office buildings (MOBs) that they are leasing from third-party owners.

In such so-called “reverse monetizations,” as EAB members called the transactions, the health systems buying the properties might be looking to gain control of as many of their operating costs as possible. Or, they might simply consider buying the MOBs they occupy to be a good business decision, in part because of a new lease-accounting rule by the Financial Accounting Standards Board (FASB) requiring them to recognize all leases on their balance sheets.

Whatever the motivation, it didn’t take long for the first reverse monetization to take place in 2018.

According to data from real estate research firm Real Capital Analytics and a report prior to the sale in the Milwaukee Business Journal, Milwaukee-based Aurora Health Care in January acquired 18 properties with a total of 1.4 million square feet of space from Toledo, Ohio-based Welltower Inc. (NYSE: HCN) for $433 million.

Tami Kou, a spokeswoman for Aurora, confirmed the sales agreement prior to the sale in an interview with the Milwaukee Business Journal. Aurora is the largest health system in Wisconsin with 15 hospitals and more than 100 other locations.

Welltower acquired 17 of the 18 facilities in Q1 2010, according to a news release and supplemental data that Welltower filed with the U.S. Securities and Exchange Commission (SEC) at that time, when the company was known as Health Care REIT.

In the supplemental filing, Welltower indicated that its total investment in a 17-property “Aurora portfolio” was $190 million at an initial first-year yield, or cap rate, of 9.1 percent. In addition to that, the file shows that the REIT also invested in the development of another MOB in its Aurora portfolio, bringing its portfolio to 18 properties and a total “investment balance” in its Aurora portfolio of $312.8 million – a figure that could include, among others, transaction costs and depreciation.

Among the buildings included in the portfolio are the on-campus Aurora Health Care Medical Group building, 2801 W. Kinnickinnic River Parkway in Milwaukee for a price of $54 million, and the Aurora Medical Center building in Kenosha, south of Milwaukee, for $24 million.

]]>http://mobscene.revistamed.com/big-reverse-monetization-kicks-off-2018/feed/0What is Revista’s Most Active Metro?http://mobscene.revistamed.com/what-is-revistas-most-active-metro/
http://mobscene.revistamed.com/what-is-revistas-most-active-metro/#commentsFri, 23 Feb 2018 17:36:50 +0000http://mobscene.revistamed.com/?p=1192Continuing focus on high medical office sales activity might lead one to wonder where all this activity is occurring. In 2017, more than 25% of sales volume was represented in only 5 metro areas. Who’s leading the pack? HOTlanta. Of the more than $15B that changed hands, Atlanta’s pie slice was over $1B or 6%. Yes, some of that is Meadows & Ohly, but only part of that portfolio actually closed in 2017. Many of the other properties that traded were not part of a portfolio. Not only is Atlanta the most active in terms of sales, but it also has 1.4M square feet of outpatient space currently under construction, second only to New York City. Almost all of the projects under way are being developed by a third party and some of that construction is speculative. This differs from the rest of the country where most projects are self-developed by the provider. That being said, if one were to build speculatively, Atlanta would certainly be the place to do it! Atlanta continues to be one of the strongest cities both in terms of population and economic growth. The developers in Atlanta come in all shapes and sizes. Loudermilk Companies covers all types of commercial real estate with a focus and understanding of the Atlanta metro area. Currently they have two sizable medical buildings under way. One is 120,000 square feet with 30% pre-leased as of ground breaking. Parkside Development is more healthcare focused with a number of projects in various phases of development. They balance their speculative risk with some build-to-suit projects for Piedmont Healthcare and other local providers. Then there are some like Realty Trust Group who often work for a provider as a fee for service, and not only for development services but in many advisory capacities as well. They are currently building for Northside Healthcare and Harbin Clinic. Subscribe to Revista for more information on these projects and stats in your market area.

Atlanta MOB Key Stats:

]]>http://mobscene.revistamed.com/what-is-revistas-most-active-metro/feed/0Revista Welcomes Three New Advisory Board Membershttp://mobscene.revistamed.com/revista-welcomes-three-new-advisory-board-members/
http://mobscene.revistamed.com/revista-welcomes-three-new-advisory-board-members/#commentsTue, 20 Feb 2018 15:13:34 +0000http://mobscene.revistamed.com/?p=1187Revista is pleased to announce the addition of three new executives, Randal Brand, Dan Eppley and Andrew Haslam, to its distinguished Advisory Board.

Randal Brand has for the past nine years been the Director of Facilities and Support Services for Seattle, Wash.-based The Polyclinic, an independently owned physician multi-specialty medical group with over 240 physicians and providers in 500,000 square foot of space in 12 locations. One of Mr. Brand’s major milestones was project management for the aggressive 18-month development of The Polyclinic’s flagship $55 million, 205,000 square foot location at Madison Center.

Dan Eppley, a Senior Vice President at Capital One Healthcare, joins his Capital One colleague Erik Tellefson on the Revista Advisory Board. Mr. Eppley is a tenured healthcare finance and real estate professional with more than 20 years of experience. He joined GE Healthcare Financial Services in 2006 and held various leadership positions with its real estate group until Capital One acquired the business in 2015. Mr. Eppley currently leads the underwriting of real estate transactions for medical office, seniors housing and skilled nursing.

Andrew Haslam, Chief Asset Officer, Real Estate and Construction, Providence St. Joseph Health, also has joined the Revista Advisory Board. He has experience in various healthcare settings, including critical access hospitals, corporate services, health insurance and real estate. Mr. Haslam currently has oversight of more than five regions of real estate professionals, and the Providence Health & Services portfolio of over 22 million square feet, 3,000 leases and more than 900 buildings with annual lease responsibilities of nearly $200 million.

Revista relies on the industry knowledge and experience of each of its advisory board members to help drive the growth and future products it will provide to the medical real estate industry.

]]>http://mobscene.revistamed.com/revista-welcomes-three-new-advisory-board-members/feed/0Revista 2018 MREIF Attendance Grows More than 60% this Year!http://mobscene.revistamed.com/revista-registration-growth-over-60-and-three-new-advisory-board-members/
http://mobscene.revistamed.com/revista-registration-growth-over-60-and-three-new-advisory-board-members/#commentsThu, 15 Feb 2018 21:09:07 +0000http://mobscene.revistamed.com/?p=1168Revista is pleased to announce that attendance at its 2018 Medical Real Estate Investment Forum (MREIF) was up more than 60% from last year’s event. More than 320 industry executives were in attendance at the Miami Marriott Biscayne Bay in Miami January 28-30.

“As a first time attendee, I found this conference much more hospitable and user-friendly than others I have attended. Not only with the events, but with reasonable access to individuals and companies our firm wanted to make contact with. Thank you Revista!” said Zelma Loeb of Loeb Architects in Dallas.

Vice President of Real Estate for Kaiser Permanente, Terry Wood said it was a “Terrific opportunity to learn more about Revista products and to network with peers and Health Care industry experts.”

Other Revista Advisory Board members thought this event might spark earlier investment in the sector for 2018 due to the deal-making aspect of this event. This national event is the only industry conference focused exclusively on data, executive-level networking and resources for the medical real estate industry. It combines the expert insights of healthcare real estate thought leaders with detailed regional and national medical property information. For updates, agenda and other information about the event please visit: http://www.revistamed.com/events/national-forum.

Please stay tuned as we decide the west coast location for our next event. We look forward to alternating coasts for this event each January.

]]>http://mobscene.revistamed.com/revista-registration-growth-over-60-and-three-new-advisory-board-members/feed/0From the 2018 Revista Medical Real Estate Investment Forum – Medical Office Sector Becoming Corehttp://mobscene.revistamed.com/from-the-revista-medical-real-estate-investment-forum-medical-office-sector-becoming-core/
http://mobscene.revistamed.com/from-the-revista-medical-real-estate-investment-forum-medical-office-sector-becoming-core/#commentsMon, 29 Jan 2018 15:30:13 +0000http://mobscene.revistamed.com/?p=1175For those involved in the buying and selling of medical office buildings, you feel it. Transaction volumes have been steadily rising for the past few years. Revista began tracking property transactions in 2014 and volumes in that year were $8.9B for MOBs. By all accounts, 2014 was a record for transaction activity for the MOB sector at that time. Well volumes have only continued to increase each year since 2014. In fact, a preliminary $13.6B in MOBs traded in 2017 which is up 13% from 2016. During this time, we have seen increased institutional investment in the space and we have seen the MOB focused REITS become a recognized investor type. This all argues that the sector is slowly but surely becoming a core asset class. Yes, investment volumes are not quite what we see in the office sector but at over 3% they are respectable and on par with several other property sectors.

Annual MOB Transaction Volume (source: Revistamed.com)

]]>http://mobscene.revistamed.com/from-the-revista-medical-real-estate-investment-forum-medical-office-sector-becoming-core/feed/02017 Development Survey Now Open Through February 9th!http://mobscene.revistamed.com/2017-development-survey-now-open-through-february-9th/
http://mobscene.revistamed.com/2017-development-survey-now-open-through-february-9th/#commentsThu, 18 Jan 2018 15:09:35 +0000http://mobscene.revistamed.com/?p=1158The Revista/Healthcare Real Estate Insights 2017 Outpatient Development Survey is Now Open – Click Here to Participate!

Healthcare Real Estate Insights and Revista have partnered to create the healthcare real estate industry’s most comprehensive survey of outpatient medical construction activity. Below we are asking you to complete a series of questions about your 2017 outpatient construction projects. Please complete information as completely and accurately as possible. We are seeking information at the company and project level for construction projects that exceed $2.5 million in value and are adding at least 5,000 square feet. Projects may be new construction or expansions. Please call Mike Hargrave at 301-873-1542 or email mike@revistamed.com with any questions.

Outpatient projects include all medical office buildings, outpatient surgery centers, dialysis centers, clinics, freestanding ERs/EDs, imaging centers, urgent care centers, retail medical buildings and other purpose built medical buildings where outpatient care is provided. Buildings may be on campus or off campus. If the project includes inpatient beds then please do not consider it outpatient. Please exclude parking structures and land in total project figures.
Healthcare Real Estate Insights and Revista will tabulate summary results which will be publicized and all survey respondents will be provided summary results including a comparison of how your firm compares to the summed results. Healthcare Real Estate Insights and Revista will also publish rankings.

Please provide accurate and complete information. We are seeking information from only those firms that have lead development responsibility for outpatient projects detailed below. This survey can accept up to 12 projects per company response. If you have more projects to submit please contact mike@revistamed.com. All data will be independently verified by Revista. If you prefer a printed form of these questions please email mike@revistamed.com.
The Survey Deadline is February 9, 2018. There is no charge for participating in the survey and we will not charge you for the results.

I wanted to get some color on this trend so I reached out to a few developers to hear their thoughts. Mark Furlan, SVP of Sina Companies in Palm Beach Gardens says “My recent experience has been impacted by having a deal structured with a client, who’s subsequent merger with another has delayed the project. I have also seen clients who have spent a lot of time programing space and trying to stay ahead of the curve in terms of delivery structures. Programing, historically taking 3 months, in a development schedule is taking twice as long.” According to Mark these are contributing factors to long and extended pre-development periods.

Jason Signor, CEO of Caddis out of Texas agrees saying “Many systems are in the midst of negotiating mergers and acquisitions which can sometimes put a hold on new projects.” Physician groups are also affected by this – they don’t want to take on new financial obligations when they are exploring opportunities to sell their practice to a hospital system, according to Signor.

With the hurricanes this past fall, many were predicting widespread effects in terms of labor and materials shortages and subsequent rising costs which could have caused some delays. However, both Furlan and Signor (Florida & Texas respectively) say they haven’t seen this in their markets so it likely isn’t a significant source of pullback.

In addition to M&A activity and delivery strategy shifts holding up projects, hospitals and systems are continuing to feel pressure from tightening reimbursements and a future shrinking patient base as the Trump administration continues in attempts to unwind the ACA. The latest development came from Trump’s tax plan in which the individual mandate penalty is repealed. Analysts say this will reduce the number of insureds by 13 million over the next decade.

Whatever the cause, verified starts volume is now showing a marked slowing and we can expect the reduction in the delivery of outpatient space to continue. Interestingly though, some developers aren’t feeling this personally. According to Signor, “Although the overall trend may be a slowing, from our [Caddis’] perspective as a third-party developer, there has been a significant uptick in activity in the last two years.”

Furlan also adds that “…healthcare clients need delivery experts to help them plan and deliver these projects. We bring expertise and third-party coverage as they seek board approvals.”

Revista is in the midst of our 2nd annual Healthcare Development Survey in which we determine how many of the projects from 2017 were developed by a third party rather than the provider. In 2016 developers made up about 30% of the market. It will be interesting to see if they are beginning to take a bigger slice of the pie! Contact Mike Hargrave if you would like to participate in this survey.